Economic efficiency of bull fattening operations in the Czech Republic

Abstract

Fattened bulls are the main source of beef in the Czech Republic (CR) and in most other EU countries. Profitability of fattening operations is a fundamental prerequisite for increasing domestic beef production. The objective of this study was to assess the economic efficiency of bull fattening operations in CR during 2013 and 2014. Data from 17 operations were collected using a questionnaire. Major cost items were determined and the return on costs was calculated while either including or excluding support payments. In 2013, average total costs reached 24,038 CZK per bull and a 1,152 CZK loss was incurred. In 2014, total costs were similar as in 2013 but the loss was 3,238 CZK per bull as a result of a higher initial purchase price of bulls at the beginning of the fattening period. Break.even points, defined as those points at which the operation reaches zero profitability, were estimated for daily live weight gains (1,189 and 1,290 g/day in 2013 and 2014, respectively) and for selling prices of bulls (91.19 and 96.05 CZK/kg of carcass in 2013 and 2014, respectively). A sensitivity analysis revealed that the most influential parameters were purchase and selling prices and live weight gains of bulls.